Sometimes trouble comes at you from an unexpected direction. One Alaska resident learned this the hard way when she sat on her outhouse toilet and was bitten by a bear — from below. Didn’t see that coming.
US law on Independent Contractor vs. Employee is based on federal and state statutes and common law, but a decision last week from overseas has US businesses concerned. Should they be?
On Thursday, the UK High Court ruled that Uber drivers were “workers” under UK law, not independent contractors, and were therefore protected by minimum wage and other laws.
But I don’t think this ruling will bite US businesses in the arse. There are important differences between US and UK law, and those differences drove the outcome here.
In the US, someone is either an employee or an independent contractor. Those are the only two options. But under UK employment law, there are three categories:
- Those employed under a contract of employment (US: employee; UK: employee/worker);
- Those self-employed people who are in business on their own account and undertake work for their clients or customers (US/UK: independent contractor);
- and an intermediate class of workers who are self-employed but who provide their services as part of a profession or business undertaking carried on by someone else (UK: worker).
Some UK statutory rights, such as the right not to be unfairly dismissed, are limited to those employed under a contract of employment; but other rights, including those claimed in the UK case, apply to all “workers.”
The question in this case, therefore, was not whether the Uber drivers were employees, but merely whether they were “workers.” They were.
The decision also turned largely on a City of London requirement relating to licensing requirements for drivers for hire. The Uber drivers were under contract with Uber London, which had the required license.
The court considered elements of control, but this case was not decided under a US-style Right to Control Test, Economic Realities Test, or ABC Test. The rules we are used to seeing in the US don’t apply in the same way overseas.
In the end, this case is noteworthy in its result — that Uber drivers were protected by UK minimum wage law and other worker protections — but the legal basis for reaching that conclusion just doesn’t apply in the US.
We will continue to see increased pressure in the US for more worker protections, and we will continue to see challenges to worker classification. But US businesses don’t need to worry about the bite from this ruling from a few thousand miles east. Of more immediate concern, at least to Alaskans visiting the outhouse, is what might be waiting a few feet below.
© 2021 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
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